GAZETTE NOTICE NO. 2481

under the guidance of a suitably qualified and experienced person in the field of training or tutelage; “Public Entity” means any department, agency, organ or other unit of the government that uses public funds in whole or in part for the procurement of goods, works or services: “Public Money” has meaning assigned to it in Section 2 of the Public Finance Management Act, 2012; “Public Procurement” means procurement by procuring entities using public funds; “Risk” means the probability or threat of damage, injury, liability, loss or any other negative occurrence resulting from external or internal vulnerabilities; “Risk Management” means the process of identification, evaluation and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor and control the probability or impact of unfortunate events or to maximize the realization of opportunities and what action should be taken; “Reservations” means exclusive preference to procure goods, works and services set aside to a defined target group of tenderers within a specified threshold or region; “Services” means any objects of procurement or disposal other than works and goods and includes professional, consultancy services, technical services, nonprofessional and commercial types of services as well as goods and works which are incidental to but not exceeding the value of those services; “Stakeholder’’ means a party that has an interest in an organization and can either affect or be affected by the business: “Standard” means characteristics or set of characteristics for an item which for reasons of quality level or compatibility with other products is accepted by the manufacturers and users of that item as a required characteristic for all items of that type; “Supplier” means a person who enters into a procurement contract with a procuring entity to supply goods, works or services; “Supply Chain Management” means the design, planning, execution, control and monitoring of supply chain activities; “sustainable procurement’’ means a process whereby procuring entities meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the procuring entity, but also to society and the economy, whilst minimizing damage to the environment; “Tender” means an offer in writing by a candidate to supply goods, services or works at a price; or to acquire or dispose stores, equipment or other assets at a price, pursuant to an invitation to tender, request for quotation or proposal by a procuring entity; “Unethical Practice” means not conforming to moral principles; “Value for money” means the effective, efficient and economic use of resources which requires the evaluation of relevant costs, benefits, along with assessment of risks and non-price attributes and/or life- cycle costs as appropriate; “Works” means a combination of goods and services for the construction, repair, renovation, extension, alteration, dismantling or demolition of buildings, roads or other structures and includes: (a) the designing, building, installation, testing, commissioning and setting up of equipment and plant; (b) site preparation; and (c) other incidental services; Executive Summary Over the years, the Government of Kenya has been undertaking Public Financial Management Reforms including Public Procurement and Asset Disposal. This National Public Procurement and Asset Disposal Policy presents the Government of Kenya strategy to further reform the public procurement system that is aligned to international best practices to achieve value for money for sustainable economic development. The policy covers public procurement and asset disposal system in the entire public sector at both levels of Government. It applies to procurement planning, procurement processing, contract management, inventory and asset management and disposal of assets as well as compliance and enforcement mechanisms. The policy seeks to cure challenges in the Public Procurement and Asset Disposal system which have over the years contributed to loss of Government funds and subsequently led to underdevelopment. It emphasizes on the need for strict compliance to the legal framework ——— Ee ©)S— 4th March, 2022 and guidelines with a view to strengthen the capacity for enforcement. The policy aims at standardizing and sealing loopholes in procurement and asset disposa] processes, contract formation and management which has previously been characterized by among other things, unfairness, unclear contract terms and conditions, nonperformance, unwarranted variations, delays and cost overruns that has led to inherent financial and operational risks. Similarly, the policy addresses ethical issues among persons involved in public procurement with a view to strengthen governance thus promote competition, accountability, transparency and integrity principles among others. This will ultimately lead to value for money in the procurement of goods, works and services. In addition, the policy seeks to address record management in procuring entities to enhance their accuracy and completeness thus ease audit trails and processes in public procurement and asset disposal. The policy also seeks to integrate marginalized groups who have been previously disadvantaged economically due to unfair competition or discrimination in government procurement opportunities, promote local industries through local content initiatives. Procurement planning and prudent inventory management is also covered in the policy which hitherto has been a major contributory factor to inefficiencies in the delivery of goods works and services. To ensure an effective and efficient public procurement and asset disposal system, the policy recognizes the role of various institutions involved in public procurement and the need for stakeholder’s engagement. It takes cognizance of the dynamism in the fast-changing technological world and the need to embrace innovation, emerging trends and sustainable procurement. The policy will be reviewed after every five years to take into account international best practices and emerging issues. 1.0 INTRODUCTION 1.1 Background The Public Procurement and Asset Disposal System in Kenya has evolved from a system which had no regulations to a legally regulated procurement and asset disposal system in line with International Standards. Key hallmarks in the evolution of the Public Procurement and Asset Disposal were the Treasury Circulars in post-independence Kenya and the Supplies Manual of 1978. The Government of Kenya has undertaken reforms over the years which commenced with the Review of the Public Procurement System in 1997. The Review identified various gaps that led to the enactment of the Exchequer and Audit (Public Procurement) Regulations, 2001, the Public Procurement and Disposal Act 2005, and the Public Procurement and Disposal Regulations, 2006. In 2010, Kenya promulgated a new Constitution. Article 227 of the Constitution of Kenya provides for a procurement and asset disposal system that is fair, equitable, transparent, competitive and cost-effective. To give effect to the Article, the Public Procurement and Asset Disposal Act, 2015, was enacted. 1.2 Situational Analysis The current public procurement and asset disposal system in Kenya has been strengthened in a number of aspects including the existence of an elaborate legal framework aligned to the Constitution of Kenya, and Vision 2030. The framework covers the public procurement and asset disposal cycle; establishment of institutions with clear mandates: decentralization of procurement giving procuring entities full autonomy to act within the law; and recognition of procurement as a strategic function in public entities. Despite the reforms undertaken, the Public Procurement and Asset Disposal system in Kenya still has challenges. The levels of compliance with the legal framework and guidelines are generally low and the capacity for enforcement remains weak. Persons involved in public procurement lack adequate capacity to handle the dynamism of procurement and asset disposal. Sunilarly, contractors have limited knowledge of the procurement systems and their obligations in the procurement process. This contributes to poor contract formation, management and implementation characterized by unclear contract terms and conditions, nonperformance, unwarranted variations, delays and cost overruns that has led to inherent financial and operational risks often occasioning loss of Government funds. Similarly, the public procurement and asset disposal system faces ethical challenges occasioned by weak governance that impede competition, accountability, transparency and integrity principles. This partly contributes to the inflated cost which the government procures goods, works and services with the ultimate result being wastage of resources and loss of public funds. In addition, records management in procuring entities is characterized by scattered, inaccurate and incomplete documentation and poor filing that hampers auditing of public procurement and asset disposal processes. For a long time, a large segment of society was economically disadvantaged due to unfair competition or discrimination in government procurement opportunities. In addition, local industries have faced stiff competition from well-established foreign firms thereby edging them out of business. Poor procurement planning by procuring entities is a major contributory factor to inefficiencies in the delivery of goods, works and services resulting in budget overruns and creating pending bills. A lot of wastage and increased cost are incurred due to unnecessary high stocks. poor storage and poor record keeping which 1s largely manual. Lack of standardization of procurement processes has led to unfairness, lack of transparency and accountability, which hampers competition and compromises value for money. Further it creates room for corrupt practices and loss of government funds. Public procurement and asset disposal system is faced with numerous risks including but not limited to financial, economical, technological, legal, environmental, social and political risks. The occurrence of these risks often leads to loss of public resources which hinders service delivery. The aforementioned challenges and the emerging issues in the dynamic business environment necessitate policy interventions on various fronts including: legislative and regulatory framework, institutional framework, capacity development, public procurement operational standards and governance. It is against this background that the National Public Procurement and Asset Disposal Policy is developed to give direction and standardize the functioning of the public procurement and asset disposal system. The Policy will facilitate a sustainable, organized and well-regulated environment that upholds the guiding principles and objectives as outlined in the Constitution of Kenya, 2010. 1.3 Purpose The Public Procurement and Asset Disposal Policy has been developed to provide direction to all public entities and other stakeholders involved in public procurement and disposal activities. Jt informs the Public Procurement and Asset Disposal legal framework which enables public entities to achieve value for money, fairness. competition, equity, equality. supplier diversity, transparency and accountability to ensure confidence in public procurement and asset disposal system. 1.4 Scope of Application The policy covers public procurement and asset disposal system in the public sector. It applies to all procuring entities of both National and County Governments using public funds for procurement of goods, works or services. It also covers procurement under bilateral/multilateral agreements where such agreements provide for use of country procurement system. The governing principles outlined in this policy apply to all public entities. Public entities may establish additional internal policies, guidelines or procedures that are consistent with the framework to supplement the governing principles contained in this document. The policy applies to procurement planning, procurement processing, contract management, inventory and asset management and disposal of assets as well as compliance and enforcement mechanisms. The public procurement and asset disposal policy takes into consideration the Kenya Vision 2030, the corresponding medium-term plans and other government policies. 1.5. Policy Goal and Objectives The goal of the Policy is to achieve a robust public procurement and asset disposal system that is fair, equitable, transparent, competitive, sustainable and cost effective. The Policy objectives are to— (i) ensure that public procurement and asset disposal system is properly regulated —_ through laws, rules and guidelines; (ii) stimulate and encourage socio-economic development; iti ensure ethical practices and promote professionalism in P Pp P public procurement and asset disposal system: (iv) standardize the public procurement and asset disposal system: (v) ensure the establishment of dispute resolution mechanisms in public procurement and asset disposal processes; (vi) foster sustainable procurement practices; (vii) continuously improve the efficiency of public procurement and asset disposal system by leveraging on technology: and (viii) promote efficiency and effectiveness; transparency and accountability; fairness; equity and value for money in public procurement and asset disposal: 2.0. GUIDING PRINCIPLES Each Public Entity shall maintain high legal, ethical, managerial, and professional standards in the management of the resources entrusted to it as a publicly funded institution and will ensure that goods, works and services are procured cost effectively. 2.1 Good Governance Good governance entails a well-functioning public procurement and asset disposal system devoid of corrupt practices. It involves transparency, accountability and predictability in decision-making processes and oversight mechanisms to guard against arbitrariness and ensure prudent use of public resources. Public entities shall establish systems and procedures to ensure procurement and asset disposal decisions are made in a systematic and structured manner. The entities shall ensure there is segregation of responsibilities in procurement and asset disposal processes. 2.2. Integrity Public officers and other persons involved in procurement and asset disposal matters shall maintain a high standard of integrity in discharging their responsibilities and obligations in a professional and ethical manner. 2.3 Equality/Equity Public entities shall provide ample and equal opportunities for participation by interested and qualified suppliers of goods, works or services. Contractors/suppliers shall be provided with the same information and public officers shall not impose any personal bias or prejudices in their procurement and asset disposal decisions. All actions taken shall be impartial and based on the merits of the subject matter. Tender documents shall not contain any bias except as otherwise expressly allowed under the legal framework. 2.4 Professionalism Public Procurement and asset disposal function shall be managed by procurement professionals with requisite qualifications recognized in Kenya. The officers shall conduct themselves in line with the code of conduct for procurement professionals. Public entities shall foster the highest standards of professional conduct and ensure continuous professional development of their procurement staff. 2.5 Transparency and Accountability Public Procurement and asset disposal processes shall be open, fair, consistent, transparent and accountable with a view to obtaining value for money. Public resources shall be used in an accountable, responsible, efficient and effective manner. 2.6 Compliance and Conformity Public entities shall comply and conform to all applicable laws, regulations, trade agreements, policies, guidelines and procedures that relate to procurement and asset disposal and not engage in any activity to circumvent the clear intention of the law. Non-compliance shall attract appropriate sanctions. 2.7 Maximization of Value for money Public procuring entities shall ensure value for money through optimum combination of total cost of ownership, quality and timeliness of the items being procured. Preventing wastage and fostering competition, transparency and accountability during the procurement and disposal processes are key conditions for achieving value for money. 2.8 Efficiency and Effectiveness Public Procurement and asset disposal processes should ensure optimal utilisation of resources, for the desired outcomes. It encompasses the performance of the procurement and disposal process as cost effectively as possible and in a timely manner. 2.9 Recognition of International Trade Treaties and Interests Kenya’s external environment is significantly influenced by the changing international and regional trade arrangements. Public Procurement and Asset Disposal system shall recognize multilateral, regional and bilateral trade agreements to which Kenya is a signatory. The Government will further endeavour, as far as is practicable, to operate by international best practice standards, thereby ensuring harmonization with our regional and international counterparts. The Government, in its policies and practice, will honour all obligations arising from bilateral/multilateral agreements on procurement. 2.10 Sustainable Procurement Public entities shall adopt sustainable procurement to meet their needs for goods, works and services to achieve value for money on a whole life cycle basis in terms of generating benefits not only to the organization but also to the society and the econo my whilst minimizing damage to the environment. 3.0 PUBLIC PROCUREMENT AND ASSET DISPOSAL INSTITUTIONAL FRAMEWORK The existing legal and institutional framework will ensure effective implementation of the public procurement and asset disposal policy. The insututions shall undertake distinct and separate roles in legislation, policy formulation, implementation, professionalism, oversight, regulation and dispute resolution. % 3.1 The Parltament/County Assemblies The responsibilities of Parliament/County Assemblies with respect to Public Procurement and Asset Disposal include the following. among others: (i) Enact and amend procurement and asset disposal laws and regulations in line with the constitution. (ii) Provide oversight in the implementation of the procurement and asset disposal Jaws and regulations through review of statutory reports, (iii) Approve and appropriate budgets to facilitate procurement of goods, works and services. 3.2 The Cabinet The responsibilities of the Cabinet with respect to Public Procurement and Asset Disposal include the following, among others; (i) Approve public procurement and asset disposal policy. (ii) Set government strategic priorities in public procurement and asset disposal. (iii), Approve public procurement and asset disposal legislative proposals before submission to parliament. (iv) Approve budget proposals before submission to parliament. 3.3 The Nanonal Treusury The responsibilities of the National Treasury with respect to Public Procurement and Asset Disposal include the following, among others: (i) Public procurement and asset disposal policy formulation. fC 4th March, 2022 (ii) Design and prescribe an efficient procurement and asset disposal management system for both national and county governments. (iii) Budget formulation. (iv) Training and capacity building for procurement and supply chain management at the national level and support at the county level. 3.4 The Cabinet Secretary Responsible for Finance The responsibilities of the Cabinet Secretary with respect to Public Procurement and Asset Disposal include the following, among others: {i) Prescribe regulations and guidelines on implementation of public procurement and asset disposal policies in accordance with procurement law. (ii) Submit proposed budget estimates to parliament for approval. (iii) Regular briefing to cabinet and parliament on implementation of public procurement and asset disposal policies, rules and procedures. 3.5 Cabinet Secretaries The responsibility of Cabinet Secretaries with respect to Public Procurement and Asset Disposal is to oversee implementation of public procurement and asset disposal policies to facilitate delivery of their mandates. 3.6 Accounting Officers The responsibilities of Accounting Officers with respect to Public Procurement and Asset Disposal include the following, among others: (i) Implementation of public procurement and asset disposal policies, rules and procedures. (ii) Capacity building of Supply Chain Management Officers in their respective procuring entities. 3.7 Public Procurement Administrative Review Board The responsibilities of Public Procurement Administrative Review Board with respect to Public Procurement and Asset Disposal is to review, hear and determine public procurement and asset disposal disputes at both levels of government. 3.8 Public Procurement Regulatory Authority The responsibilities of PPRA with respect to Public Procurement and Asset Disposal include the following, among others: (i) Regulate the public procurement and asset disposal system, monitor and report on its functioning. (ii) Enforce compliance with the public procurement and asset disposal law and provide technical support to procuring entities. 3.9 Kenya Institute of Supplies Management The responsibilities of KISM with respect to Public Procurement and Asset Disposal include the following, among others: (i) Establish, monitor, improve and publish the professional standards for supplies _ practitioners. (ii) Register procurement professionals and take such disciplinary measures as may be necessary to maintain proper standard of conduct among such persons. (iii) Oversee professional examination standards and certification. 3.10 The Attorney-General The responsibilities of the Attorney General with respect to Public Procurement and Asset Disposal include the following, among others: (i) Provide legal advice to public entities on public procurement and asset disposal matters. (ii) Drafting of legislation pertaining to public procurement and asset disposal. (iii) Represent procuring entities in judicial proceedings involving public procurement and asset disposal matters. 3.11 County Treasuries The responsibilities of the county treasuries with respect to Public Procurement and Asset Disposal include the following, among others: (i) Implementation of Public Procurement and Asset Disposal policy, laws and regulations at county level. (ii) Formulation of county Budget. 3.12 County Executive Member Responsible for Finance The responsibilities of County Executive Member responsible for Finance with respect to Public Procurement and Asset Disposal include the following, among others: (i) | Oversee the implementation of public procurement and asset disposal policy in the county government. (ii) Submit proposed budget estimates to county assembly. (iii) Regular briefing to county executive committee and county assembly on implementation of public procurement and asset disposal policies, rules and procedures. 3.13 Judiciary The responsibility of the Judiciary with respect to Public Procurement and Asset Disposal is to review, hear and determine public procurement and asset disposal disputes. 4.0 PREFERENCE AND RESERVATIONS SCHEMES The Government being the largest buyer, has the potential of achieving targeted socio-economic goals through creation of opportunities for participation of disadvantaged and marginalised groups, and local industries in public procurement. In consideration of socio-economic development factors, the government shall put in place affirmative programmes and preference schemes to facilitate participation of disadvantaged groups, local contractors and promote locally manufactured products through public procurement and asset disposal. Policy Statement The government shall promote the protection or advancement of regions, persons, categories of persons or groups previously disadvantaged by unfair competition or discrimination as well as locally manufactured products through the application of preference and reservation schemes. Objectives: (i) To increase participation of the historically disadvantaged groups and micro, small and medium enterprises (MSME's) in public procurement and asset disposal opportunities. (ii) To stimulate and encourage the growth and development of local industries for socio-economic development. Strategies: (i) The government shall establish preference and reservation schemes that will benefit the target groups, local industries and regions. (ii) Public procuring entities shall apply preference and reservation schemes in accordance with the law. (iii) Apply sanctions to those procuring entities who fail to implement preference and reservations schemes including submission of statutory reports as required by the law. (iv) Develop capacity of citizens, local contractors and suppliers through training, mentoring and transfer of knowledge. (v) Develop guidelines on local content to enhance the procurement of locally manufactured goods, works and services. 5.0 PROCUREMENT PLANNING Procurement planning is a critical tool that enables execution of the approved budget and ensures cost savings, efficient business operations and increased value for money. A procurement plan should be based on indicative or approved budget and informs cash flow projections. Where procuring entities engage in unplanned procurements or fail to adhere to the approved procurement plan, it may disrupt other programs and result in budget distortions and pending bills. Policy Statement All procuring entities shall prepare a comprehensive and realistic procurement plan within their approved budget taking into consideration the provisions of the preferences and reservation schemes. Objective: To promote effectiveness, economy and efficiency in the use and application of public resources. Strategies: (i) Timely preparation of annual procurement plans in line with annual work plans and budgets. (ii) Timely execution of approved annual procurement plans. 6.0 PROCUREMENT PROCESS Sound public procurement process should be efficient, competitive, fair, simple, transparent and accountable for effective service delivery. In order to standardize public procurement processes across all public entities, the law shall prescribe principles, basic rules, guidelines and procedures to govern the public procurement and asset disposal system. Policy Statement Procuring entities shall obtain goods, works, and services through a process that is competitive, fair, transparent, accountable and cost effective. Where circumstances do not permit the use of a competitive process, the procurement !aw shall prescribe alternative procurement methods to be applied with proper justifications. Objectives: (i) To promote efficiency and effectiveness, competitiveness, transparency and accountability, fairness, equity and value for money in public procurement. (ii) To standardize the public procurement processes. (iii) To ensure the establishment for dispute resolution mechanism in procurement process. (iv) To facilitate sustainable procurement practices. (v) To continuously improve the efficiency of procurement system by leveraging on technology. Strategies The Government shall— (i) leverage on technology for efficient, effective, transparent and accountable procurement system; (ii) develop and use standard tender documents and formats, manuals and public procurement guidelines; (iii) provide a framework to achieve economies of scale in public procurement; (iv) embrace open contracting data standards; (v) ensure uniform and consistent application of the procurement and asset disposal law, (vi) institute appropriate administrative dispute resolution framework; and (vii) develop sustainable procurement framework and guidelines: 70 CONTRACT FORMATION AND MANAGEMENT Contract management encompasses the life cycle of a contract and ensures the parties involved fulfill their contractual obligations. There is need to adopt a prudent contract formation and management which entails systematically and efficiently managing contract development, implementation, and administration for maximization of financial and operational performance and managing inherent risk. Policy Statement Procuring entities shall ensure that contractual terms and conditions are clear and are managed efficiently in a manner that minimizes risks. Contractual arrangements shall portray fairness, transparency and accountability and ensure value for money. Objective To implement public procurement contracts in a timely and cost- effective manner that achieves value for money while managing risks. Strategies: G) Public entities shall enter into a written contract with a successful bidder in line with the award decision based on tender documents. (ii) Public entities shall institute mechanisms for effective contract management that ensure proper documentation, review, monitoring, and evaluation of projects, to mitigate against inherent risks. (iii) Public entities shall ensure that performance and payment obligations are met in line with contract terms and conditions. (iv) Public entities shall ensure that an efficient and effective dispute resolution mechanism is in place. (v) Public entities shall maintain data base of all procurement contracts. 8.0. INVENTORY CONTROL, ASSET AND STORES MANAGEMENT AND DISTRIBUTION Inventory control, assets, stores management and distribution entails prudent management of movable and immovable assets, stores and associated logistics arrangements geared towards, timely delivery of value. Deliberate efforts should be put in place to maintain stock at optimal and economical levels, eliminate theft, security and safety threats, losses, wastage and misuse, to ensure efficient and effective management of assets and distribution of stores. Policy Statement Public entities shall manage and utilize their inventory, assets and stores efficiently for the purpose of ensuring continuity of operations and preventing wastage, loss, damage and lock up of funds. Public entities shall ensue efficient and effective logistics management geared towards timely delivery of value whilst minimizing costs and the attendant risks. Objectives: (i) To maintain inventory at optimal levels and ensure their safety and security in storage for proper utilization of resources and effective service delivery. (ii) To ensure proper documentation, safety and maintenance of public assets. (iii) To implement an efficient and effective logistics management framework that ensures timely delivery of stores and minimizes potential risks. Strategies: (i) Public entities shall ensure that procured items are inspected, received and stored in a secure and organized manner taking into account their safety and security in storage. (ii) Public Entities shall leverage on technology for efficient, effective and sound inventory/stock management. (iii) Public entities shall develop and maintain an up to date asset register. (iv) Public Entities shall ensure efficient and effective transport management that takes cognizance of timely delivery. 9.0 ASSET DISPOSAL Disposal involves the identification, valuation and putting in place measures for economic divestiture of public assets. When public assets become obsolete/surplus/unserviceable they shall be disposed in a timely manner to avoid incurring holding and maintenance costs and minimize loss of value. Asset Disposal Planning allows government agencies to remove redundant assets that might otherwise reduce efficient and effective service delivery. It involves detailed assessment of assets identified as surplus/obsolete/unserviceable by the relevant departments and putting in place methods for their disposal. 4th March, 2022 Policy Statement Each public entity shall prepare and implement a comprehensive and realistic annual disposal plan for assets which are obsolete/surplus/unserviceable to be disposed off in the most economical, fair, transparent and accountable manner. Objectives: (i) To prevent loss of value, eliminate holding and maintenance costs of surplus /obsolete /unserviceable assets and obtain a fair residual value upon disposal. (ii) To establish and define standards, methods and/or restrictions for disposal of the assets in a legal, sustainable, accountable and cost-effective manner. Strategies: (i) Preparation and execution of annual disposal plans. (ii) Use appropriate disposal methods to ensure environmental sustainability and/or obtain the highest realizable value from surplus/obsolete/unserviceable assets. (iii) Develop asset disposal guidelines that will ensure uniform and consistent application of the law in disposal of Government and donor funded assets. (iv) Institute appropriate administrative dispute resolution framework. (v) Develop and use standard disposal documents and formats. 10.0 RECORDS MANAGEMENT Sound management of public procurement, asset disposal and contract records is a critical component for good governance, effective administration, transparency, accountability and delivery of quality services. Good records management entails the maintenance and retention of up-to-date, complete, accurate, reliable, secure and accessible records. Policy Statement Public entities shall maintain complete, accurate, authentic and accessible records pertaining to each procurement and contract management activity and transaction for a period as may be specified in the public procurement law and develop a Public Procurement Records Retention and Disposal Schedule. Objective: To provide guidance for efficient and effective creation, use, storage, maintenance of and access to all forms and types of public procurement and asset disposal records. Strategies: (i) Public entities shall adopt efficient and effective Procurement Records Management Systems. (ii) Public entities shall design systems and procedures for controlling, receiving, maintaining, securing and tracking movements of procurement and asset disposal records and documents. 11.0 ETHICS IN PUBLIC PROCUREMENT AND ASSET DISPOSAL Ethical practices in public procurement and asset disposal are founded on values that preserve public confidence, public interest, fairness, impartiality, transparency, accountability, professionalism and ethical standards. To promote these values, the governance system should spell out penalties and sanctions to deter corrupt and unethical practices. Weak governance in public procurement and asset disposal system impede competition, accountability, transparency and_ integrity principles; which ultimately raise the cost at which the government procures goods, works and services. This results in wastage of resources and loss of public funds. There is therefore need to promote professionalism, integrity, ethics, accountability and transparency in public procurement and asset disposal system. Policy Statement Persons involved in public procurement and asset disposal proceedings shall subscribe to ethical standards in accordance with the public procurement and asset disposal law and other relevant legislation. Objectives: (i) To ensure ethical practices in public procurement and asset disposal processes. (ii) To ensure professionalism in the procurement function. Strategies: The government shall — (i) establish a legal framework that prescribes sanctions and penalties against persons who breach the provisions of the public procurement and asset disposal law and other related legislations. (ii) establish a public procurement and asset disposal dispute resolution mechanism to deal with complaints. (iii) establish public procurement governance structures that are clear, understandable and co-ordinated. (iv) put in place appropriate systems and frameworks to monitor and evaluate public procurement performance and outcomes. (v) develop, implement and enforce a code of conduct and ethics for all persons involved in public procurement and asset disposal. (vi) develop a comprehensive structured capacity development programmes in public procurement and asset disposal. 12.0 STAKEHOLDERS ENGAGEMENT Stakeholders are individuals, groups of individuals, firms or development partners who have an interest or some aspect of rights or ownership that may impact or be impacted by the public procurement and asset disposal policy and can contribute to the work or the outcome of the public procurement process. There is therefore need to have synergetic relationships and inter-linkages amongst various stakeholders in order to achieve successful implementation of a vibrant public procurement and asset disposal system. Policy Statement The Government shall develop a framework to effectively promote stakeholder’s inter-linkages and relationships for the proper functioning of the public procurement and asset disposal system. Objective To encourage collaborations and partnerships among key stakeholders in public procurement and asset disposal both at national and county levels of government. Strategies: (i) Establish clear communication channels and feedback mechanisms. (ii) Embrace consultative approach on public procurement and asset disposal matters. 13.0 CAPACITY BUILDING Capacity building enhances knowledge which is critical to the achievement of a well-functioning procurement system in a dynamic environment. To enhance compliance, persons involved in public procurement and asset disposal system must continuously train on the legal framework that governs the procurement and asset disposal system. On the other hand, it is equally important that contractors involved in the procurement system also have a full understanding of its workings. This enables them to participate in procurement opportunities and to interface with the system at various levels to meet their needs. Policy Statement Public entities shall carry out regular and continuous capacity building on persons involved in the public procurement and asset disposal system with a view to ensure efficient, effective and ethical procurement of goods, works and services. Objectives: (i) To ensure that persons involved in public procurement and asset disposal are competent, qualified, well trained and equipped. (ii) To ensure that contractors understand the procurement and asset disposal systems and their responsibilities and obligations in the procurement process. Strategies: (i) | Public entities shall carry out comprehensive Training Needs Assessments to inform Capacity Building Plans for persons involved in public procurement and asset disposal. (ii) The government shall structure and implement capacity building to cater for all aspects of persons involved in public procurement and asset disposal including procurement laws, policies, guidelines and emerging issues. (iii) The government will undertake a structured comprehensive education and training programme for persons involved in public procurement and asset disposal including contractors. (iv) The government shall continuously develop the capacity of citizen, local contractors and disadvantaged groups through training, mentoring and transfer of knowledge. 14.0 RISK MANAGEMENT IN PUBLIC PROCUREMENT AND ASSET DISPOSAL Risk management entails measures which should be taken prior to and during the entire procurement and asset disposal process, contract management and inventory management to mitigate political, environmental, economic, technological, social and legal risks which may lead to loss of public funds. Policy Statement Public entities shall put in place risk management framework covering all aspects of public procurement including procurement planning, processing, contract management, inventory management and asset disposal. Objective (i) To embrace risk management practices in the public procurement and asset disposal system. Strategies (i) Public entities shall develop a comprehensive procurement and asset disposal risk management framework. 15.0 COMPLIANCE AND ENFORCEMENT All persons involved in public procurement and asset disposal should comply with the laws, policies and regulations related to public procurement and asset disposal. Both administrative and legal mechanisms should be put in place to enforce compliance by public entities and persons involved in public procurement and asset disposal. Policy Statement All persons involved in public procurement and asset disposal shall comply with all applicable laws, regulations, trade agreements, policies, directives and procedures. Objective: (i) To enforce compliance and conformity with the laws, policies, regulations and directives related to public procurement and asset disposal. Strategies: (i) |The Government shall establish an institutional framework to monitor and enforce compliance to public procurement and asset disposal laws. (ii) The Government shall establish structures to monitor and evaluate the performance of the public procurement and asset disposal system. (iii) The public procurement and asset disposal legal framework shall provide for administrative and legal sanctions, and penalties against non-compliance. 16.0 EMERGING ISSUES Emerging issues in public procurement and asset disposal are new trends that impact on the procurement practices due to the dynamism of the business environment. While the current legal framework is elaborate, the government should keep abreast with emerging issues that may affect the public procurement and asset disposal system. Policy Statement The Government shall continuously identify and address any emerging issues that may have an impact on the public procurement and asset disposal system. Objective (i) To ensure the public procurement and asset disposal system copes with changes in the socio-economic, legal. environmental, technological and political environment. Strategies: The government shall— (i) encourage continuous research and innovation on emerging issues in public procurement and asset disposal system that promotes Kenyan solutions; (ii) regularly undertake review of the public procurement and asset disposal system; and (iii) embrace continuous capacity building on emerging issues in the public procurement and asset disposal system. 17.0 POLICY ADMINISTRATION, IMPLEMENTATION, MONITORING, EVALUATION AND REVIEW For effective policy implementation, a logical and realistic framework is required, with associated programmes, resources and action plans. Actions must be purposefully linked and coordinated with one another and with sectoral initiatives of the Government and partners at national and county levels. To track and monitor the implementation of this policy, an effective Monitoring and Evaluation (M & E) framework is 1equired. 17 | Policy Administration and Implementation The National Treasury shall take the main responsibility for overseeing and coordinating the implementation of the public procurement and asset disposal policy in consultation with key stakeholders. To realize the outcomes set out in this policy, an appropriate implementation framework shall be put in place by the government and other key stakeholders. The implementation framework shall outline key interventions, activities, performance indicators, time lines and lead implementing agencies. 17.2. Monitoring of Policy Implementation Monitoring of Policy Implementation is a continuous exercise by key stakeholders. However, the National Treasury will establish an integrated M & E framework to help in real time tracking of the policy implementation across the Public Sector. The framework should include policy objectives, strategic interventions, key performance indicators and expected outcomes. 17.3 Evaluation The aim of evaluation will not only be to assess the status of implementation but also inform policy and administrative actions for improvement. The evaluation will be done after every three years, however should the outcome of the evaluation reveal the need for amendments, then the Policy shall be amended. 17.4 Review of the Policy It is envisaged that this policy will be reviewed after evcry five years to accommodate the emerging issues, changing needs, priorities of the government and key stakeholders.